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Lawmakers took steps to protect customers' identification and strengthen measures to prevent leakage of product into the illegal market.

PARIS ACHEN/CAPITAL BUREAU - Kodey Kern, assistant manager at Foster Buds, weighs some 'Alpha Blue' marijuana buds at the company's location at Northeast Glisan Street in Portland Tuesday, July 18, 2017.PORTLAND — A new state marijuana law designed to protect customers from federal prosecution is already changing the nature of sales at dispensaries.

Effective as soon as it was signed by Gov. Kate Brown April 19, Senate Bill 863 prohibits dispensaries from recording, retaining or transferring the names or other identifying information of customers who purchase marijuana.

The regulation is one of several new state laws designed to shield the cannabis industry from a potential federal crackdown on the state's legal market and to refine overall rules governing the industry.

"Changes seem to be occurring on a daily if not an hourly basis on the federal side, and I personally am very concerned that we give as much protection to Oregon citizens to ensure their personal identification information isn't compromised through some kind of federal subpoena or some other act that a business is not going to have the fortitude or maybe the legal basis that the state would have to fight those type of requests," said Sen. Floyd Prozanski, D-Eugene, a chief sponsor of Senate Bill 863.

The absence of customer records would hinder authorities from prosecuting customers for federal marijuana crimes.

PARIS ACHEN/CAPITAL BUREAU - Left, Earth Dragon chai infused with tetrahydrocannabinol, or THC, the main psychoactive compound in cannabis. Right, Earth Dragon chai infused with cannabinoids, or CBD, a compound in marijuana that produces no high and is popular among medical users.However, from a customer service perspective, the change brought some disadvantages to retailers.

"It was nice to be able to bring up their sales history. We used to keep track of what products customers bought so if they forgot what they bought last time we could pull up a record of it," said Alex Richter, manager of Foster Buds' location on Northeast Glisan Street in Portland. "Now, we're like a bar or a convenience store. We just look at your I.D. to make sure you're over 21."

U.S. Attorney General Jeff Sessions has publicly disagreed with the Obama administration's acceptance of state marijuana programs, which violate federal law. In May, Sessions wrote to Congress asking it to scrap a budget amendment in effect since 2014 that effectively shields state medical marijuana programs from federal prosecution.

Sessions' comments on marijuana prompted Prozanski to add an emergency clause to Senate Bill 863, making it effective upon passage.

Rep. Ann Lininger, D-Lake Oswego, a lawyer who co-chairs the Legislature's Joint Committee on Marijuana Regulation, said other new laws also aim at fortifying the industry against federal backlash.

Senate Bill 1057 allows recreational marijuana retailers to quickly switch their adult-use recreational licenses to a medical-only license in case of "federal obstacles," Lininger wrote in a memo on new cannabis laws. The law assumed that Congress would continue the budget amendment, known as the Rohrabacher-Farr amendment, to prohibit the federal government from spending money to interfere with medical marijuana programs.

The bill mandates that medical cannabis producers, processors, wholesalers and medical dispensaries undergo the same stringent seed-to-sale tracking of products that the recreational industry has been subject to since recreational sales were legalized.

The bill also directs state regulators to create a database of anonymized medical marijuana transactions to help detect and prevent diversion of product into the illicit market.

An analysis by Oregon State Police earlier this year showed product is leaking into the illegal market.

"Anything we can do to cut off leakage … would put us in a stronger position" with the federal government, Sen. Ginny Burdick, D-Portland, co-chairwoman of the marijuana regulation committee, said in May.

House Bill 2198 gives the Oregon Liquor Control Commission additional authority to respond to applicant or licensee misconduct. Another new law, Senate Bill 56, allows the liquor control commission to immediately suspend any licensee who has transferred product into the illegal market. The bill also orders the creation of a state hotline where local authorities can verify whether a grow site is registered or licensed.

Oregon is one of eight states, plus the District of Columbia, that has legalized recreational adult use of cannabis. Twenty-one others states have legalized medical marijuana.

Despite local efforts to protect the industry, the federal government may not need states' cooperation to enforce the federal ban.

The U.S. Department of Justice could shut down the marijuana industry through the federal courts, according to Mark Kleiman, a professor of public policy at NYU Marron Institute of Urban Management, when he was quoted in Business Insider in February.

The federal government would only need to obtain copies of marijuana license applicants and seek an injunction against the applicants from selling cannabis, Kleiman has said.

Such a shutdown would likely revive Oregon's illegal market, wipe out 12,500 jobs and drain state coffers of a projected $105 million in annual recreational marijuana tax revenue, used to support public education and services, Lininger said.


Paris Achen
Portland Tribune Capital Bureau
503-385-4899
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